May 26, 2009

Jiangsu Gaochun Ceramics Co. Ltd, a Chinese professional ceramics manufacturer that recently resumed trading, announced a restructuring plan, whereby the State-owned Assets Supervision and Administration Commission of Gaochun county will transfer 23 million shares of Gaochun Ceramics to China Electronics Technology Group Corporation No. 14 Research Institute for RMB6.7 per share. Upon completion of the share transfer, the NO.14 Research Institute will become the largest shareholder of Gaochun Ceramics. In addition, Gaochun Ceramics will issue 80 million shares at most to a wholly-owned subsidiary of the Research Institute and five natural persons in a non-public manner.

Banks in the Ningxia Hui Autonomous Region are cutting fees in order to secure more customers. On May 18, Bank of Communications announced that from June 1 the bank will cut the service fee for online interbank remittance from 0.7 to 0.2 percent of the remittance amount and cut the maximum fee for a single remittance transaction from RMB 50 (approx. US$7.3) to RMB 20.

Haier Venture Investment in concert with Haier Group bought 300,000 shares of Qingdao Haier on May 21, 2009, accounting for 0.02 percent of total shares. The move show Haier Venture Investment's confidence in the long-term prosperity of China's stock market and Qingdao Haier’s outlook. Haier Venture Investment also plans to purchase up to 26,470,000 shares of Qingdao Haier, or 1.98 percent of the total outstanding stock during the next 12 months.

China had overtaken the US for the first time in the term of luxury goods consumption by the end of January 2009, according to a report by the World Luxury Association, however, the speed of growth in luxury goods sales in Beijing, Shanghai and Shenzhen markets started to slow down for the first quarter of 2009 under the stress of the recession. As China's property prices have dropped since last year, luxury brands in Europe and America are seeking to invest in Shanghai’s commercial real estate in a move to add some new profitable pipelines.

With Wal-Mart opening its first store in Zhengzhou, the capital of Henan province, on May 16, the world's three retail giants Wal-Mart, Carrefour and Metro now all have operations in Henan. The economy of the province has developed rapidly during the past two years, while several factors attracting foreign investment have emerged, including the availability of well placed commercial space, appreciation potential in the value of real estate, lower operating costs and a package of favorable policies introduced by the local government. In view of these opportunities, many international enterprises have expressed interest in expanding their presence there.

May 25, 2009

The insurance industry in Jinzhou, Liaoning experienced steady growth during the first quarter of this year, despite the global financial crisis. A total of 23 insurers in the city recorded premium revenue of RMB491 million (approx. US$72 million) during the period, an increase of 12 percent over a year ago. The growth can be mainly attributed to improved operation, enhanced supervision and strong risk management.

Construction of Schiller’s aircraft manufacturing facility started in Zhangjiakou, Hebei province on 16 May. With an investment of US$80 million, the aircraft manufacturing facility is expected to be put into operation by 2010. The manufacturing facility’s initial annual production capacity will reach 200 aircraft and then will expand to 600.

China Aircraft Services Limited (CASL) announced the opening of its new aircraft maintenance hangar yesterday. With an investment of HK$400 million on the hangar compound building, tools and equipment, the new hangar occupies an area of about 10,000 square meters to accommodate one wide-body and one narrow-body aircraft at the same time. Five airlines have decided to become customers of the new hangar including United Airlines and China Airlines.

Guangzhou Automobile Industry Group will acquire a 29 per cent stake in Hunan Changfeng Motor for approximately RMB1.2 billion (approx. US$176 million). After the acquisition, Guangzhou Automobile Industry Group will become the largest shareholder of Hunan Changfeng Motor, while Changfeng Group will become the second largest shareholder with a 21.98 per cent stake. The acquisition agreement is expected to be signed on Thursday at the earliest.

Hangzhou Zhencheng Pharmaceutical delivered sales revenue of RMB420 million (approx US$61.5 million) in 2008, up 100 percent from a year earlier. Profits before taxes increased 220 percent from a year earlier during the same period. Net profit rocketed 920 percent during the same period. The company saw a year-over-year increase of 67 percent in sales revenue for the first quarter of 2009. The significant increases in results were mainly attributable to the electronic commerce business mode.

May 22, 2009

UFIDA Software announced that the company will acquire Chongqing MIT Technology, a leading product lifecycle management software provider in China, for RMB6.9 million (approx. US$1 million). The acquisition will include tangibles and intangible assets, existing products and accounts receivable of Chongqing MIT Technology. As of 31 December 2008, Chongqing MIT Technology had assets totaling RMB3.1 million (approx. US$454,000).

China’s Shandong province is home to more than 750 carmakers, and production of heavy business cars in the province has accounted for over 30 per cent of the country’s total, according to Shandong Association of Automobile Manufacturers (SAMA). Production of light cars in Shandong has accounted for over 25 per cent of the country’s total.

According to a survey conducted by the National Bureau of Statistics of China, more than 60 per cent of retail enterprises in Harbin, Heilongjiang province still saw steady growth in sales in the first four months of the year despite the financial crisis, mainly driven by promotions launched by the enterprises to weather the crisis.

Sino-Platinum Metals announced that its Yunnan province-based subsidiary would resume operations in late May this year, with initial output of 120 tons of nickel per month. The subsidiary had shuttered its production lines on October 1, 2008 due to the significant drop in the price for nickel and the increasing cost for raw materials such as vitriol and sodium sulphide. In view of positive turnaround in the Chinese nickel market, the board decided to resume operations in a move to prepare for further development.

Information from the Statistics and Census Service of Macao indicated that the value of retail sales for the first quarter of 2009 amounted to MOP4.97 billion (US$622 million), a quarter-on-quarter decline of 2 per cent. Retail sales of watches, clocks and jewellery took the largest share of 21 per cent, at MOP1.06 billion (US$133 million), which was followed by sales of goods in department stores. Regarding the business outlook for the second quarter of 2009, about 46 per cent surveyed retailers expect the sales volume will increase or remain stable compared with the first quarter, whereas 54 per cent expect a decrease. Meanwhile, about 72 per cent predict the retail prices will remain stable or increase, while 28 per cent forecast a drop.

May 20, 2009

Heilongjiang province, China’s foreign trade totaled US$1.4 billion and US$5.1 billion in April and the first four months of 2009, down 5.6 percent and 11.3 percent respectively from the same period of last year, according to data from Department of Commerce of the province. Nevertheless, the decline in monthly foreign trade has shown a downward trend since March. Noticeably, exports of mechanical and electrical products increased 30 percent to US$1 billion during the period while hi-tech product exports rose 4.6 percent to US$76 million.

HSBC may find acquisition opportunities at the end of this year or early next year as it expects consolidation in the banking industry, group chief executive Michael Geoghegan said. Geoghegan noted that the bank will take two years to study if the credit card business in the US can be linked to those in other regions and to see if the economic situation will further deteriorate. Despite the fast growth in bad debts, he is still optimistic about the future development of the bank's credit card business.

In recent year, China’s software industry has grown into one of the fastest growing sectors in the country, with an annual growth rate of over 30 percent. Many favorable factors brought about by the financial crisis have provided new opportunities for Chinese software enterprises although the crisis has had a negative impact on the operation of these enterprises. To weather the financial turmoil, the Chinese government has put in place policies to boost domestic demand and increase investment in infrastructure, which would bring new opportunities to enterprises specializing in the deployment of management software for the telecom, communication and medical sectors. In addition, the global financial crisis has created a chance for the country’s industrial structure adjustment and industry upgrade.

Taiwan Life Insurance said its Chinese joint venture had gained the approval of the Beijing-based China Insurance Regulatory Commission to set up a branch office in Fuzhou City, Fujian Province. King Dragon Life Insurance, a 50-50 joint venture formed by Taiwan Life and China’s Xiamen C&D Corporation, will be allowed to open for business in Fuzhou City.

CDC Software, a wholly-owned subsidiary of CDC Corporation and a provider of industry-specific enterprise software applications and business services, recently announced it has signed a binding term sheet to acquire Informance International, in exchange for shares of CDC Software. The acquisition is subject to several customary closing conditions, including the execution of definitive documentation related to the acquisition, the receipt of all requisite approvals and consents, and the satisfactory completion of due diligence by CDC Software.

May 19, 2009

According to statistics revealed at a conference on Hubei province’s financial situation, the province’s insurance market experienced a stable upward trend for the last four months. Insurance premiums collected across the entire province increased 16.3 percent year-on-year to RMB13.7 billion (approx. US$2 billion), of which, property and life insurance businesses received premium payments of RMB2.6 billion (approx. US$375 million) and RMB11.2billion (approx. US$1.7 billion) respectively, both at higher growth rates than the national average in China.

Macao’s Statistics and Census Service indicated that per-capita spending of visitors decreased by 5% year-on-year to US$205 in the first quarter of 2009. Analyzed by place of residence, per-capita spending of Mainland visitors took the lead, at US$494, up 15.1 percent year-on-year. Per-capita spending of same-day visitors dropped 15% to US$61.

Transactions in the housing market in Kunming, Yunnan province totaled 5,017 in April 2009, a 16-month record and an increase of 1,500 from the prior month. For the month, the prices for newly built housing in the city dropped by 4.5 percent over the year-earlier period, however incicated a rise of 0.9 percent from the prior month, while prices of existing homes rose 2.2 percent month-on-month, ranking the second behind Shenzhen nationwde. Existing homes showed a year-on-year rise of 1.2 percent.

China's Zhejiang province will launch a two-year campaign to crack down on illegal addition of uneatable substances and abuse of food additives such as clenbuterol and melamine, in a move to solve food safety problems. Meanwhile, the province will blacklist companies whose food products fail to meet relevant quality and safety standards.

In a move to prevent illegal use of additives, including clenbuterol, in food products, nine responsible governmental agencies of Baoan District, Shenzhen, Guangdong province, jointly carried out a four-month campaign among food producers and resellers in the district this year. More than 4,000 relevant enterprises were inspected during the campaign, with operators in the pig farming sector warned not to use clenbuterol.

May 18, 2009

Ctrip.com International, Ltd, a leading travel service provider for hotel accommodations, airline tickets and packaged tours in China, announced its unaudited financial results for the quarter ended March 31, 2009. Net income was RMB 121 million (US$18 million) in the first quarter of 2009, up 23 percent year on year. Net revenues were RMB 401 million (US$59 million) for the first quarter of 2009, up 18 percent year on year. Gross margin was 78 percent for the quarter, compared to 80 percent in the same period of 2008.

The solar energy sector in China’s Shandong province recorded high growth this year, despite the financial crisis. ShanDong Sangle Solar Energy, as an example, posted a more than 50 percent of monthly increase for the first four months of 2009. On April 28, the company received orders for 41,125 solar energy water heaters from dealers throughout the country, hitting a new record in daily order once again.

The Jinhua Administration of Exit & Entry Inspection and Quarantine conducted a thorough investigation into breeding farms in the city that supply pork to the city’s pork products exporting enterprises, in a move to ensure the safety of the pork products exported from the city. According to investigation results, no lean meat powder was used in the farms in live pig breeding.

The administration of livestock breeding of Longhui county, Hunan province recently launched a learning program, to strengthen implementation of epidemic prevention laws, conduct survey and study on breeding of live pigs, promote breeding technologies and improve awareness of raisers about the harmfulness of lean meat powder.

A RMB90,000 (approx. US$13,177 ) animal disease testing laboratory has been put into operation in Meili town, Changshu city, Jiangsu province. Approximately 70% of animal products available in the town are non-locally produced. The animal disease control center of Meili has enhanced its oversight over meat products at slaughterhouses to avoid contaminated pork containing clenbuterol.

May 15, 2009

Shandong Yinguang Chemical Industry Group, a leading civil explosive materials provider in China, reported sales revenue of RMB350 million (approx. US$51.3 million) in the first quarter of 2009, thanks to mergers and acquisitions and reorganizations. With assets totaling RMB1.2 billion (approx. US$176 million million), the company has a total of 30 subsidiaries.

China Southern Airlines recently reported its provisions for impairment of fixed assets and foreign exchange option contracts for last year. According to the Guangzhou-based carrier, it plans to dispose of some less profitable aircraft, in a move to reduce its operating costs and optimize its fleet, which is in line with its strategic development plan. The 23 aircraft include four Boeing 777-200As, six Airbus A300-600s and 13 MD-90s. In accordance with China’s accounting regulations and the International Financial Reporting Standards, the airline recorded approximately 1.791 billion yuan (US$0.3 billion) in provisions for impairment of the fixed assets last year.

According to a spokesperson for the government of Chongqing, the government plans to expand the coverage of live pig breeding insurance to more pilot districts and counties, to weather the decline in pork prices due to the H1N1 flu. Rongchang and Fuling will be included in the insurance scheme, in addition to Hechuan, Yubei, Zhongxian and Qianjiang.

Nanjing Iron and Steel Union Co., Ltd, a Chinese steel manufacturer, achieved profits of RMB250 million (approx. US$36.7 million) for the first four months of the year, despite the gloom in the global steel sector arising from the financial turmoil. Yang Siming, Chairman and CEO of Nanjing Iron and Steel Union, said the impressive performance was mainly attributable to the reorganization of the company in 2003, which increased its steel production capacity from 2.5 tons to 6.5 million tons and enhanced its total assets from RMB10.4 billion (approx. US$1.47 billion) to RMB28 billion (approx. US$4 billion).

Bank of East Asia, the largest independent local bank in Hong Kong, plans to open a branch in Zhengzhou, Henan province, China and has applied for approval with the Banking Regulatory Commission of the province. The branch is expected to open for business late this year if everything is coming up roses. In addition, Standard Chartered Bank has inspected the city many times, aiming to speed up its efforts to establish a branch in the city.

May 14, 2009

Information from the Statistics and Census Service indicated that Macao registered 551,010 visitor arrivals in package tours in March 2009, up by 30.9 percent from a year earlier. Visitors from Mainland China (437,565) and Taiwan (26,650) increased substantially by 43.5 percent and 39.4 percent year-on-year, and those from Japan (17,687), Thailand (12,248) and Malaysia (11,772) also rose by 17.7 percent, 19.1 percent and 16.7 percent respectively; however, visitors from Hong Kong (19,945) decreased by 16.3 percent. In the first quarter of 2009, visitor arrivals in package tours grew by 14.3 percent over the same period of 2008 to 1,368,556. In the first quarter of 2009, visitor-guests of hotels accounted for 61.9 percent of the total number of tourists, up from 55.2 percent in the corresponding period of 2008.

A Qinyang City, Henan province-based company recently exported four tunnel jumbos, each valued at US$200,000 and weighing 30 tons, to Pakistan, marking that the province has for the first time exported such equipment. The tunnel jumbos exported were custom built for Pakistan.

Customs statistics show that throughput for April 2009 at ports in Chongqing, China, was US$500 million, down 9.4 percent from the same period of the prior year but up 34 percent compared with that in March 2009. The rebound was mainly driven by substantial growth in export volume and value during April 2009, with export value and volume rising 20.5 and 393.1 percent respectively.

Shaanxi province, China’s foreign trade totaled US$487 million in the first quarter of the year, a year-on-year growth of 34 percent. Imports increased 144 percent to US$213 million while exports declined 0.6 percent to US$274 million, according to statistics from the Department of Commerce of the province. The province’s foreign trade with Asia rose 66.6 percent during the quarter, with imports rising 508 percent year-on-year to US$128 million. In addition, the bilateral trade with Africa and Europe also increased 83 percent and 50 percent respectively from the same period of last year.

Yunnan Tin Company is speeding up the development of tin materials and tin chemicals. The two emerging industries have accounted for 35 percent of the company’s total revenue. In addition, Yunnan Tin continued to enhance the research and development of highly processed products.

May 13, 2009

The US-based Dow Chemical Company, a leader in science and technology, plans to invest US$200 million to build a logistics center in Tianjin, China. Government officials of the city said that the government appreciates Dow Chemical’s investment in the city as the company is an international well-known chemical group with advanced technology and advantages in management and talent. The government will continue to support the development of Dow Chemical in Tianjin by creating a better environment and providing the best services for the company.

Taiwan Semiconductor Manufacturing Company (TSMC), one of the world's largest contract chipmakers, said recently that its consolidated revenue for April surged 58.1 per cent from the previous month to NT$22.45 billion (approximately US$681 million), making it the highest level since the global economic slump began taking its toll on electronics consumption. However, the company’s consolidated revenue for the first four months of this year declined 46.8 per cent year on year, to NT$62 billion (approximately US$1.9 billion). TSMC forecast that on a consolidated basis, its revenue will expand to between NT$71 billion (approximately US$2.1 billion) and NT$74 billion (approximately US$2.2 billion) in the second quarter.

Hunan Valin Iron & Steel, becoming the second largest shareholder of Fortescue Metals Group (FMG) not long before, recently signed an overall strategic cooperation agreement with FMG., the third largest iron ore supplier in Australia. Under the agreement, Valin Iron & Steel will coordinate enterprise resources in Hunan province and banking resources across the country, providing equipment and financing supports for FMG’s further expansion. In addition, FMG is planning to list on Shanghai Stock Exchange, in a move to become the first foreign ore enterprise to list in China.

Xilin Steel Group, a large steel maker based in Heilongjiang province, China, achieved RMB1.7 billion (approx. US$250 million) in gross industrial output value during the first quarter of 2009, despite the shrinking demand for steel from international markets arising from the global financial turmoil. The company has successfully weathered the financial crisis by taking a series measures to reduce costs and enhance production efficiency. Additionally, with a total investment of RMB540 million (approx. US$79), a high speed wire rod production line of the steel maker is expected to be put into operation next November.

Dalian Petrochemical Co., a subsidiary of China National Petroleum Corporation (CNPC), posted profits of RMB570 million (approx. US$84 million) for the first four months of the year, hitting an all-time high since its inception, thanks to its insistence to details management and optimized production despite market pressure brought about by the worldwide financial crisis. The company paid taxes of RMB2.8 billion (approx. US$412 million) during the period, an increase of over 2.2 billion (approx. US$323 million) from the same period of the prior year.

May 12, 2009

Pork sales are heavily hit by the clenbuterol event and the A/H1N1 influenza in Qingyuan city, Guangdong province. Statistics show the live pig price in the city now stands at approximately RMB10/kg, down nearly 50 percent from RMB19/kg for the same period of last year. In light of the current difficulties, pig breeders are advised to pay more attention to price information and market situation, in a move to avoid huge losses.

The global financial crisis brought a significant negative impact on China’s IT industry. However, the industry still has a positive outlook due to four major favorable factors such as booming online game industry, large-scale investment in 3G sector and an increase in mergers and acquisitions.

Tianjin, China sold houses of 2.24 million square meters (23,930 units) in April, 2009, up 11.5 percent from a year earlier. Transactions by value reached RMB13.9 billion (approx US$2.04 billion) during the month, a year-over-year increase of 13.9 percent. The increases were mainly attributable to such policies as expanding domestic demand and aggressively encouraging house consumption put in place by the Chinese government and the city government.

Xilin Iron and Steel Group realized an industrial output value of RMB1.7 billion (approx. US$249 million) in the first quarter of this year, an increase of 3.8 percent over a year ago. This increase can be mainly attributed to consumption of the high-priced inventory, cost reduction, adjustment to marketing strategies in slack seasons.